May
3
2012
Finding Investors For Your Movie
Author: Guy
Finding Investors For Your Movie Project
You are an independent film producer. You have a business plan, a great script, a good budget, and realistic sales projections. You have talked to distributors, ran some cast names by them and they think you have a distributable movie. What’s next? You need to raise the money!
Probably the most common question concerning financing is; how do you go about finding investors? Answer: You find the people who have the money and you do this by the networking of contacts.
First off, who has the money? Know what the 24 highest paid professions are in the US? (2006 US Bureau of Labor Statistics)
1. Surgeon ? 1,850
2. Anesthesiologist ? 4,610
3. OB/GYN ? 4,610
4. Oral and maxillofacial surgeon ? 9,600
5. Internist ? 6,790
6. Prosthodontist ? 6,710
7. Orthodontist ? 3,240
8. Psychiatrist ? 1,380
9. Chief Executive Officer ? 0,880
10. Engineering Manager ? 0,210
11. Pediatrician ? 0,000
12. Family or general practitioner ? 7,980
13. Physician/surgeon, all other ? 7,100
14. Airline Pilot ? 4,090
15. Dentist ? 2,660
16. Podiatrist ? 1,130
17. Lawyer ? 0,590
18. Dentist, any other specialist ? 6,040
19. Air Traffic Controller ? 0,430
20. Computer and Information Systems Manager ? 0,110
21. Marketing Manager ? 0,020
22. Natural Sciences Manager ? ,560
23. Sales Manager ? ,950
24. Astronomer ? ,780
Obviously, these professions are dominated by the medical field. So let’s concentrate on those professions then as our initial pool of investors. But here is your problem; Doctors and Dentists in particular are notoriously hard to reach. They are unbelievably busy and are protected by the most aggressive receptionists on the planet. So skip the medical guys you think? No, because all of these professionals are busy. That’s how they got to be where they are; they work hard and long hours. So how do you get their attention? The three following points will help you.
One, and this is very, very, important; you HAVE to have a referral. Someone they know whose name you can use to get your foot in the door. You get that name by networking. People you personally know. They personally might not have any money, but who do THEY know that might have funds to invest? And the chain begins, link by link. You know A, who knows B, who knows C, who knows D. So when you call and try to get your foot in the door, you have a referral name. “DR. X, I have spoken recently (or played golf with, or met with, etc.) with Dr. Y (or Mr. Z) and he suggested that I contact you.” By using this strategy you are not just another nobody, trying to steal precious time.
Secondly, the most important thing always comes down to your offer. The only way to get doctors or any other highly paid professional to pay attention to you – let alone respond – is to provide them with a very compelling value proposition, prove why they should talk to you, give them an incentive to meet with you, and a compelling reason why they need to act now .
Use the federal and state incentives film production incentives. By coupling the federal tax incentive (Section 181) with an individual states production incentive, you can recover up to 75% of your investors money before distribution! For instance, if you filmed in Michigan, they have a 40% production incentive (can go up to 42% depending on where in the state you film). Couple that with an investor who is at a 35% federal tax rate (someone who makes a taxable income of over 7,700) and what you have is an immediate return of 76% before even the first sale is made. More realistically, say you could promise a 53% return, because state incentives of 25% are more common as are lower marginal tax rates (federal tax rate of 28% at an average adjusted gross income of ,900).
This is an investment that will give your professional a 50-70% return on their investment in the first year! They will not believe you when you tell them this number (we’ll discuss this in item #3). So what do you offer, what is the incentive for them to act now? The federal incentive is currently set to expire the end of this year (2009)! That’s right. They need to get on board because there is no guarantee that the incentive will be extended another year.
And third, you need to legitimize what you are saying to your prospect. Anyone can promise high returns, so you need to prove to them that what you are telling them is accurate. Get an accountant, better yet a CPA, to write you a white paper on the tax advantages of film investments. Or you write it. Have them sign it. By having a tax professional legitimize your claim of a high initial ROI (return on investment) you have added immensely to your credibility. Have a chart made up listing the expected return given a certain investment and marginal tax rate.
In summary;
1. Target your investor pool (highly paid professionals)
2. Network your contacts
3. Obtain referrals
4. Present an exciting offer and why they need to act now
5. Add credibility to your presentation
Jack Heape is a native of Columbia, South Carolina. He attended school in North Carolina, where he was active in the arts, performing in numerous theater, dance, and TV productions. Jack received his BS degree in Economics from Excelsior College, and graduated with honors with a Masters in Project Management from the University of Arkansas. After graduation from school, Jack entered the US Navy, where he served in various capacities, in particularly as Supply Officer on various nuclear submarines stationed in Charleston, SC. Currently the Executive Director of the ,Carolina Film Factory, a 501c(3) corporation, Jack is also the general partner for Hobo Productions, LLC. Jack has over 20 years of experience in Marketing, Advertising, and Public Relations.
Directing Highlights
Dollar Girl (2007)
Six Degrees of Desperation (2007)
Saving Maggie (2008) In production
Producer Highlights
Final Reckoning (2006)
Dollar Girl (2007)
Six Degrees of Desperation (2007)
Saving Maggie (2008)
E-motion (2009) Preproduction
Ruby (2009) Preproduction
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